Every time I used to drain and add oil it would quickly turn black. That was most probably because i've been driving with a faulty o2 sensor and apparently the air fuel ration due to this is one reason oil turns black.

Oil is low at the moment and need to top up, is it ok to mix with the existing black oil(which has become black for above reason) or must it be drained and new oil put in? If so what is so bad about oil which has turned black from the improper air fuel ratio?

If you've had the O2 Sensor replaced, I suggest draining the oil. Oil is fairly cheap, it's easy to DIY, and it's the lifeblood of the engine. If you suspect it's bad just replace it.
– Michael LonghurstJul 10 '18 at 19:20

1

You can "top it off," without any real issues. If you're doing an oil change, never reuse the old oil (otherwise, what is the point?).
– 3DaveJul 10 '18 at 20:15

You should change the oil based on service interval, and always stay on the safe side (i.e. change it sooner rather than later). Keep a not of what's been done and when. If you've changed the oil in the past 5k and the manufacturer interval is 10k, then try and change between 8-9k after the last serice and you'll be fine, as long as oil consumption isn't high and you're keeping track of things correctly.

Oil mixes with the remaining oil from the previous change, and goes black very quickly in many instances and depending on how much care was taken in the service. See my answer on What do I do? How do I fix it?